Markets exhibited some tenacity Thursday, one day before closing out a week, before a long holiday weekend. Markets were down heavy before the opening, sagging on a stunning 7% decline in the Nikkei. But US benchmarks, stalwarts all year long, shook off early 1% plus losses to finish UNCH. I am maintaining my bearish stance, but as traders we must be able to adapt quickly and decisively. As much as I pay attention to the indicies, in my opinion it is more imperative to pay a real focused attention on your individual stocks. If this market decides to resume its seemingly endless advance it pays to have seen stocks that started to go green even before the benchmarks began their early comeback. Stocks that showed just that type of behavior today were SNPS, which was strong right out of the gate, even taking out a 36.10 flat base trigger intraday, but closing under it. Volume was hefty. Watch tomorrow. DNKN ended slightly in the red but found some support after hitting its prior 39.88 cup with handle trigger pivot point it took out 5/2. EXP rallied almost precisely off its former 72.41 flat base trigger it took out 5/15. Like I said earlier, I am still bearish, and the markets still have to be given the benefit of the doubt here, but the last thing you want is to let some healthy winners, recede or even evaporate at these extended levels. Be prudent. I will wait, no need to rush here, until the weekend most likely to deploy cash back to work. There will always be opportunities to take advantage of on either the long or short side. Thanks to our men and women in uniform in advance.
Stocks that can be bought as they retest prior breakout triggers are TMUS TIVO BDX. TMUS, fighting the big two telecom providers VZ T, is quickly making a name for itself, and broke out from a 19.19 cup base trigger on 5/21. The chart that is, and therefore the company too. It has been on a 4 week winning streak where it has gained a solid 32%. Actually its up 8 of the 9 last weeks, and a look on the daily shows a nice long cup base that began in the first week of last October. The bottom has a nice rounding shape, and volume was calm, and trade tight during that formation. The right side is building and volume has picked up. It tested that 19119 trigger today, and with a little volatility returning would not be surprised to see if test again. VZ looks better than T, as it found 50 day SMA support, while T is swimming beneath its.
TIVO is trading right at its 12.80 double bottom trigger it took out on Tuesday. TIVO is a stock that has several things a technician like myself looks for. It has enjoyed almost precise 200 day SMA support recently, and the trade has been tightening up. Upon finding support along that 200 day SMA in the middle of April, the move higher has been accompanied by heavy volume, displaying someones appetite, including the day of the breakout. During yesterdays wild reversal the stock remained calm closing down just .11 on declining trade. It reported a good number on Monday, and there has been tight trade ever since.
BDX most recently took out a 3 week tight trigger of 97.24 on 5/3. The stock has enjoyed a nice 28% move YTD. It is hard to find a blemish on BDX’s daily or weekly chart. On the daily you will find very tight, constructive action. The weekly is showing excellent accumulation, as it almost takes on the look of a well built staircase upward, with many tight weekly closes. I know a lot has been made on JNJ and its long weekly winning streak, but this one has been overlooked, being up every week except for 2 thus far in 2013. The medical device group has acted well with stocks like SYK ZMH displaying good action. SYK recorded a bearish outside day yesterday, and looks headed for a 50 day SMA test real soon. ZMH looks better and even with this wild week could potentially set up a bullish 3 week tight pattern depending on Fridays close.
Stocks that can be bought as they retest their 50 day SMAs after recent breakouts, which is not uncommon are NVS CSX FNP NKE. NVS most recently took out a 64.17 flat base trigger on 1/4. Look for the Swiss medical company to find 50 day SMA support at 72.70.
CSX, which chart has recently undergone some very good looking changes after lagging the strongest rails (UNP NSC CNI CP KSU), last took out a cup with handle trigger on 2/13. The rails have been weak as of late and look for this one to catch a bid at its 50 day SMA at 24.60.
FNP, the former LIZ, Liz Claiborne, last took out a 13.76 cup with handle pivot point on 1/14. Volume has been very light on its way toward a 50 day SMA test at 20.75 which should be purchased if its held.
NKE, one of my favorite retailers along with M, curiously did not recover much as the benchmarks did Thursday, last took out a 3 week tight trigger of 60.35 on 4/11. It is a couple handles from its 50 day SMA at 61.15, but that in my opinion would be a gift.
Stocks that can be bought as they take out the following specific triggers in firm trade are AMAT RGC PAG USG.
3 week tight trigger AMAT 15.28.
3 week tight trigger RGC 19.10.
Cup with handle trigger PAG 32.83.
Flat base trigger USG 30.13.
Stocks to be viewed as shorting opportunities are TRV RTI MXIM. TRV, many of which consider this name to be best of breed insurer, may have underwent a trend change recently. On 4/23 the stock reported earnings and rose 2%, but reversing from an all time high reaching earlier in the session to close upon its lows for the day. The stock has never went higher than than 89.00 all time high set that day. On Tuesday the stock penetrated its 50 day SMA to the downside in very heavy trade, which finished up a 5 day losing streak. Lets be careful here since it did just this in mid November of last year, falling below the 50 day in heavy trade before recapturing it. Lets look to short this name on a move back to 50 day SMA resistance at 84.80.
RTI, among the weak metals sector, has a daily chart that shows some loose action. Volatile, weak groups tend to be the characteristic of lagging sectors. A peek on its weekly chart shows some big time distribution the weeks ending 4/12 and 4/19, where during that 2 week period the stock lost 11%. It did garner 200 day SMA support and has since risen 3 of the last 4 weeks in frail trade and is beginning to encounter 50 day SMA resistance. It is always important to locate other sluggish names in the sector, and this group has its share. Two that come to mind both in their own personal bear markets are former stalwart SCCO, trading below both its 50/200 day SMAs, and RTI biding its time below its 200 day. Lets look to short RTI on a move back to 50 day SMA resistance at 29.50.
MXIM, among the lagging semiconductor group, has been looking lost as of late. The group has been looking decent as of late. In fact going into this week the ETH SMH was trading very tightly, and on the verge of creating its own 3 week tight trigger depending on tomorrows close. The previous 2 weekly closes were within one penny of each other. Very tight. For MXIM, its troubles began to appear even before its 7% plunge below its 50 day SMA after reporting earnings 4/26. Trade ballooned that day. It enjoyed 50 day support most of this year until the beginning of April when 50 day support became shaky. Since the earnings related move below it has not been able to get back above, and before today was down 6 of the last 7 sessions. Many in elevated trade. Lets look to short this one on a move back to 50 day SMA resistance at 31.40, or with a sell stop 0f 29.15 if 200 day support gives way.
Buy at former trigger retest TMUS 19.19. Stop following posted entry 18.45.
Buy at former trigger retest TIVO 12.80. Stop following posted entry 12.40.
Buy at former trigger retest BDX 97.24. Stop following posted entry 94.70.
Buy at 50 day SMA NVS 72.70. Stop following posted entry 71.65.
Buy at 50 day SMA CSX 24.60. Stop following posted entry 24.15.
Buy at 50 day SMA FNP 20.75. Stop following posted entry 20.20.
Buy at 50 day SMA NKE 61.15. Stop following posted entry 59.65.
3 week tight trigger AMAT 15.28. Stop following posted entry 14.65.
3 week tight trigger RGC 19.10. Stop following posted entry 18.65.
Cup with handle trigger PAG 32.83. Stop following posted entry 31.55.
Flat base trigger USG 30.13. Stop following posted entry 29.55.
Short at 50 day SMA resistance TRV 84.80. Buy stop following posted entry 86.15.
Short at 50 day SMA resistance RTI 29.50. Buy stop following posted entry 30.30.
Short at 50 day SMA resistance MXIM 31.40. Buy stop following posted entry 32.35.
The author is flat.